Fidelity Launches Practice Management Benchmarking Dashboard for RIAs

Tool allows advisors to compare themselves in both the financial and marketing areas to their peers


There are four main goals that David Canter and his team of Fidelity Institutional Wealth Services practice management consultants and relationship managers are trying to accomplish on behalf of RIAs who custody with Fidelity IWS. They are: helping advisors grow; helping them be more efficient; keeping them current on regulatory and legislative developments in Washington; and managing human capital at their advisory firms.

As part of that effort, Fidelity IWS announced Wednesday that it has launched a benchmarking program and a Web-based practice management dashboard tool for its affiliated advisors. Using as a springboard the 2011 Fidelity RIA Benchmarking Study, on which it partnered with Quantuvis Consulting (and with whom it will continue to work on future studies and building the dashboards), Canter said in an interview Tuesday that the study and dashboards are meant to not merely allow RIA firms to benchmark themselves against the broader industry and their specific peer groups, but also to provide actionable steps to achieve their goals and monitor progress toward those goals.

“If firms want to grow, they have to devote resources” to achieving those goals, Canter (left) counseled, beyond merely hiring a business development officer. “This benchmarking program doesn’t just put benchmarking findings into a box,” Canter said, but is a true, “dynamic” business planning tool that allows firms to set goals for themselves.

The benchmarking dashboards–which provide both financial and marketing views–allow firms to insert their business financials and service data quarterly into a secure website, and then to choose up to 38 peer groups, based on metrics like business model, AUM, numbers of employees, annual revenue and region, and benchmark themselves to firms that are not only like theirs, but also to firms that they aspire to be like. Using dials for separate measurements, the firms can include their own goals to see how they are performing against those goals and their peers.

The marketing dashboards cover metrics like the number of clients added to the firm, marketing expenses, acquisition cost per new client and marketing costs per advisor.

Sporting an intuitive approach using an online wizard, the dashboards meet advisors’ needs for an online tool–“advisors want elegant and easy,” said Canter–while in a future iteration, said Mathias Hitchcock, part of Canter’s team, advisors will be able to upload their financials from standard accounting software packages, and download their data as well from the dashboard. A future iteration of the dashboards, said Canter, might include the ability for advisors to share their data with other advisors in a custom peer group.

Advisory firms are given the option of sharing their data with Fidelity, which will allow Fidelity IWS’ relationship managers “to offer more targeted consulting,” said Hitchcock, who joined Fidelity IWS in 2008 and has been working on the benchmarking tool for the past 18 months.

Canter, executive VP for practice management and consulting at Fidelity IWS, joined Fidelity in 2009 and is a veteran of Schwab Advisor Services who also

worked for several advisory firms, so he has seen how advisor practice management works, he said, from both the provider of services side and the advisory firm side. He called the benchmarking dashboards a “strong business readiness tool” for advisors.

The Benchmarking Study done with Quantuvis found several disconnects when it came to advisor marketing and business development. First, while the majority of the 375 RIA firms surveyed viewed marketing as “critical to their future growth,” fewer than 30% of those firms have a written marketing firm.

Second, while the majority of surveyed firms said their principals are responsible for generating 81% of their business, 75% of the firms do not have “robust” succession plans, Canter said.

Third, while 78% of the firms said they viewed client service as their largest business opportunity and 78% said service was the largest driver of referrals, 91% of firms do not actually measure client satisfaction.

While this year, Canter said, Fidelity’s consultants and 50 regional relationship managers spent their advisor practice management efforts on marketing and business development, in 2012 they will focus on helping advisors build “actionable succession plans.” He suggested that there will be consolidation in the advisory world, regardless of whether regulators and legislators in Washington set up an SRO for advisors or not.

“There will be more deals” over the next 10 or so years, Canter said, driven not only by demographics, but also by the HighTowers, United Capitals and Focus Financials of the world.

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